Longtime Manafort deputy Rick Gates admits embezzlement

Alexandria, Va. – The government’s star witness in the financial fraud trial of Paul Manafort testified Monday that he embezzled hundreds of thousands of dollars from the former Trump campaign chairman – and told jurors that he and Manafort committed crimes together.

Rick Gates has been regarded as a crucial witness for the government ever since he pleaded guilty this year to two felony charges and agreed to cooperate in special counsel Robert Mueller’s investigation into possible ties between Russia and the Trump campaign.

The hugely anticipated courtroom showdown brought Gates face-to-face with his longtime business associate and fellow Trump campaign aide. His testimony, given in short, clipped answers as Manafort rarely broke his gaze from the witness stand, follows that of vendors who detailed Manafort’s luxurious spending and financial professionals who told jurors how the defendant hid millions of dollars in offshore accounts.

But Gates, described by witnesses as Manafort’s “right-hand man,” is expected to provide the most damning testimony about Manafort’s state of mind as well as his own role in the crimes.

Gates told jurors that he siphoned off the money without Manafort’s knowledge by filing false expense reports. He also admitted to concealing millions of dollars in foreign bank accounts on Manafort’s behalf and to falsifying loan applications and other documents to help Manafort obtain more in bank loans.

“We didn’t report the income or the foreign bank accounts,” Gates told jurors, noting that he knew he and Manafort were committing crimes each time.

Gates read off the names of more than a dozen shell companies he and Manafort set up in Cyprus, St. Vincent and the Grenadines and the United Kingdom to stash the proceeds of Manafort’s Ukrainian political consulting work.

Asked whether the money in the accounts was income to Manafort, Gates said, “it was.”

Gates said he repeatedly lied to conceal the bank accounts and, at Manafort’s direction, he would classify money that came in as either a loan or income to reduce Manafort’s tax burden.

Manafort’s defense has sought to blame Gates for any illegal conduct and cited the embezzlement to impugn Gates’ credibility.

Gates, who also served in a senior role in Donald Trump’s presidential campaign, is expected to face aggressive cross-examination once prosecutors are finished questioning him. Gates pleaded guilty to financial fraud and to lying to investigators as he negotiated the plea agreement earlier this year. He is awaiting sentencing.

The criminal case has nothing to do with either man’s work for the Trump campaign and there’s been no discussion during the trial about whether the Trump campaign coordinated with Russia – the central question Mueller’s team has tried to answer. But Trump has shown interest in the proceedings, tweeting support for Manafort and suggesting he had been treated worse than gangster Al Capone.